Overhaulin'

Whats my best way to save for a home with a car loan?

Heres my situation I have managed to save approximately $5500 for a home and I have another $2800 on its way from my tax return and I want to start looking this summer, also I owe approximately $10000 at 5.9% interest on my car. Would it be in my best interest to pay off the car loan, try and combine the loans if I find a home and keep the cash for a down payment or for fixing up my house or maybe to keep the loans seperate and wait and see what I find first? I have excellent credit also if that helps. Thank you for any help you can provide. I make approximately 40,000 a year and am looking for a home priced around 100,000 maybe.

Public Comments

1. Keep the loans separate and see what you find first and what kind of mortgage rate you can get. It would be best if you could leave your car at 5.9% because this is probably less than your house interest will be.
2. One thing you leave out is your income. In today's mortgage market, your $8300 will not go far toward buying a home. You will need every bit of it. The reason your income matters is that other loans are taken into account when seeing if you are eligible for a mortgage. The typical bank wants to see no more than 30 % of your net (after loan payments and taxes deducted) income going to a mortgage payment.